Theresa May announces major U-turn on housing benefit cap for elderly and vulnerable

Prime Minister says Local Housing Allowance cap will not be applied to supported housing or the ‘wider social rented sector’

Theresa May has announced a major U-turn on controversial changes to benefits for people living in social housing, including thousands of elderly and vulnerable people in supported accommodation.

The Prime Minister drew cheers from MPs when she announced that the Government would scrap plans for all social housing tenants to have their housing benefit capped in line with the private rented sector.

Charities had previously warned that the proposed cap – due to be implemented in April 2019 – would have a particular impact on supported accommodation as uncertainty over future funding could deter housing associations from building housing for vulnerable people, who rely on the support to stay out of hospital or residential care.

The Independent revealed last year that the changes could result in a “backdoor bedroom tax” as the Local Housing Allowance (LHA), the cap used in the private sector, is calculated on the size of the household, rather than the size of the property.

Speaking during Prime Minister’s Questions, Ms May said: “I can also say today that as part of our response to the review, we will not apply the Local Housing Allowance cap to supported housing.

“Indeed we will not be implementing it in the wider social rented sector and the full details will be made available when we publish our response to the consultation.”

The Government will publish a new model on how it plans to support and sustain supported housing on 31 October, she said.

Her comments come ahead of an opposition-day debate on social housing in the Commons, where Labour will call on the Government to rule out cuts to supported housing and instead adopt a new “supported housing allowance” to safeguard the accommodation.

Shadow Housing Secretary John Healey said: “Once again, Labour is winning the arguments and making the running on Government policy.

“Ahead of our opposition-day debate later today, the Government has given ground, but the devil will be in the detail – and the funding.

“Labour will continue to press the Government to protect the long-term future and funding of supported housing.”

Liberal Democrat housing spokesperson Wera Hobhouse also welcomed the U-turn, adding: “This cap would have hit the most vulnerable in our society, including the homeless and victims of domestic violence living in shelters.

“It is right that the Government has now U-turned on this cruel and heartless policy.

“Ministers must now reverse their damaging decision to scrap housing benefit for 18-21s, that risks pushing more young people into homelessness.”

More than 700,000 people live in supported accommodation, which include homes for people with learning and physical disabilities along with women and children fleeing domestic violence.

Dan Scorer, head of policy at learning disability charity Mencap, said: “We have long argued that the Government’s LHA cap was unworkable and would have a devastating impact on the ability of housing providers to invest in and provide suitable housing for people with a learning disability. In worst case scenarios it could have harmed the move away from housing people in inappropriate accommodation, such as inpatient units where people are at an increased risk of abuse and neglect.

“We hope the further details due to emerge from Government will remove the uncertainty that has been plaguing the supported sector, undermining future investment, and allow organisations to continue their work in providing the lifeline that supported housing offers to disabled people.”

Local housing allowance has many of the same rules as housing benefit, but there are some extra rules that limit the amount of help people can get for a private rented home.

There had been concerns plans to cap housing benefit could lead to rent arrears and increase the risks of people becoming homeless.